Why Five Below (FIVE) Stock Is Surging on Wednesday

Tickers in this article: FIVE

NEW YORK (TheStreet) -- Five Below  is soaring on Wednesday after reporting revenue and earnings growth over the three months to Feb. 1, one of the few retailers to do so over a holiday season more aggressively promotional than normal.

By midmorning, shares had surged 15.8% to $44.

The discounts chain reported net income of 47 cents a share, 2 cents higher than analyst averages compiled by Thomson Reuters. Quarterly sales jumped to $212 million, a 22.1% year-over-year increase, beating analysts' expectations for $207.78 million in sales.

"Despite the adverse weather impact during the most important shopping weeks of the year, we are pleased to have ended the fourth quarter with improving trends," said CEO Thomas Vellios in a statement.

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TheStreet Ratings team rates FIVE BELOW INC as a Sell with a ratings score of D+. The team has this to say about their recommendation:

"We rate FIVE BELOW INC (FIVE) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, premium valuation, poor profit margins and weak operating cash flow."

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.